30th March, 2020

Wage subsidies grow to $130bn in stimulus to employers, sole traders

The Federal Government has unveiled an unprecedented $130 billion program to subsidise wages for employees during the COVID-19 crisis.

Disclaimer: This article is designed as a news piece and may not reflect current information. For a wrap-up of stimulus measures available to Australian businesses, click through to this page.

In a move to take pressure of the welfare system while also incentivising employers to keep the workers on for as long as possible, the Government has today announced a massive increase to its wage subsidy scheme as part of its ongoing response to COVID-19.

The new scheme, dubbed JobKeeper, will reimburse employers up to $1500 per fortnight per employee, as long as the business meets a series of guidelines (outlined below).

The payment applies to full-time, part-time and casual workers, along with sole traders. (Apprentices, on the other hand, had provisions included in the first round of stimulus measures, which are still in place).

In a press conference earlier today, Prime Minister Scott Morrison said the payments are designed to “keep the engine of our economy running”.

“It may run on idle for a time, but it must continue to run,” he said. “Our businesses, large and small, right across the entire economy, will share the load with our welfare system.”

Additionally, Morrison also announced a change to the existing JobSeeker program – raising the partner income threshold to nearly $80,000.

What is the new JobKeeper program?

The JobKeeper program is a wage subsidy reimbursement program. It is designed for employers to keep employees on their books during a prolonged period of declining revenue.

How long will the scheme last?

Businesses are encouraged to top up wages beyond $1500

If a business receives the $1500 payment, they will receive the subsidy – but they can also add more money on top of that to fulfill a worker’s complete wage.

This announcement brings the total amount to be spent on COVID-19 related stimulus to $330 billion.

“Our government has made a decision today that no government has made before,” Scott Morrison said.

“Our goal is to protect lives and livelihoods of Australians to protect and preserve the economy that we depend on and to get to the other side as well.”

Parliament will need to be recalled in order to pass legislation approving the package.

MYOB announces support for wage subsidies

MYOB chief executive Greg Ellis has spoken out in favour of the new scheme.

“Small businesses around the country have spent weeks trying to keep their doors open, pivoting their businesses to comply with rapidly evolving COVID-19 requirements and, most importantly, continuing to pay their employees,” said Ellis.

“The ATO will use Single Touch Payroll data to pre-populate employee details for most businesses and with the Government requiring visibility of payments to employees, what’s key is that small businesses use a reliable approach to tracking and reporting payroll, which accounting software can support.”

If your business is impacted by COVID-19 and you’re looking for assistance on any matters related to business finance and taxation, we recommend consulting with a financial advisor as soon as possible. Click here for specialist advisors near you.

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